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Everyone is entitled to fair pay.  In addition, many companies provide a range of employee benefits as a means of attracting and retaining high quality staff. 

Employee benefits vary – from occupational or company pensions to private health insurance, life insurance and income protection, from having a company car and using it for personal travel, to share save schemes and discounts on products or gym membership. Anything that’s provided to your employees in recognition of their contribution to your business can be called a benefit.  Larger companies can sometimes offer flexible benefits, where they list out all the benefits employees can have access to and employees choose the benefits that most appeal to them from the list, according to certain limits.

It’s important to remember that many benefits are taxable, and that as an employer, you have certain obligations to run any benefit scheme in accordance with guidelines set down in law. For instance, if you employ 5 or more staff you will have to offer a stakeholder or company pension to your staff.

HMRC, for example, will need to be informed about the agreements you make over use of a company car: whether fuel is to be paid for exclusively by the employee or business mileage is to be claimed on a pence-per-mile basis.  Private health insurance may be a taxable benefit, but there could be a tax advantage to your business in arranging policies that protect your employees’ health and welfare.

Your independent financial adviser (IFA) can give you guidance on the types of scheme available, which ones are most popular in terms of providing incentives to staff, and how to manage set-up and ongoing administration so that it has minimum impact on your day-to-day business. 

Questions you might like to ask your IFA…

What are the tax advantages to each benefit scheme?
Is it best to choose one provider, or find specialists for each kind of benefit?
Who does the administration for these benefits, the provider or my company?

Employee pension schemes

Whether you’re setting up as a sole trader, or employing hundreds of people you need to think about plans for the future after retirement.  Your pension, and any pension arrangements for your employees, is best arranged under the expert guidance of either an independent financial adviser (IFA), or an Employee Benefits Consultant (EBC), which is an IFA that specialises in business advice. 

As an employer, if you have five or more employees, you’ll be obliged to provide access to an employee pension scheme – which for smaller businesses is usually run through a third party.  From 2012, the Government is introducing National Employment Savings Trust (NEST) pensions, but your business may be able to offer other equivalent or better schemes.  Whatever type of scheme you provide, you’ll need to get advice on how much you as an employer should also be contributing to the pension scheme.  This encourages employees to save for the future.

Your IFA can help you choose a pension provider you feel comfortable with, and one that has a scheme to suit the needs of your business and your staff.  There may be a certain amount of administration in setting any scheme up, but once it’s in place, most paperwork can then be handled directly between the provider and your employees.  Many schemes these days offer online scheme management, which you may prefer.

There are so many options involved when you’re setting up a pension scheme (choosing a provider, understanding how the scheme invests money for individuals, the types of fund available, deciding on defined benefits or defined contributions, and helping individuals understand when and how they can access their retirement funds), an IFA’s expertise can be invaluable to your business.  It could also make many thousands of pounds difference to your employees – and to you – in retirement benefits.

Questions you might like to ask your IFA…

  • As an employer, what are my obligations to provide a pension scheme for my staff?
  • How much should my company contribute to each employee’s pension?
  • Can you help me arrange different schemes for different types of employees?
  • What will happen if my employees leave the company?



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